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2014 (12) TMI 463 - AT - Wealth-taxEnhancement in net worth of Shah Rukh Khan-assessee - Addition on account of residential house and jewellery purchased by the wife Gauri Khan of the appellant from a loan given to her by the assessee - Transfer of asset - Escapement of assessment - Held that:- Even as per the provisions of the Wealth tax Act, extending cash loan, to the wife, by the assessee does not come within the definition od “asset”, therefore, it can be said that there is no “transfer of asset” as has been alleged by the Department. - The case of the Revenue is that interest free loan was given to his wife by the assessee to enable her to acquire the aforesaid asset, and thus, in view of section 4(1)(a)(i) such assets have been transferred by the assessee. - We are not agreeing with the Assessing Officer because there is no “transfer of asset” by the assessee rather, an asset has been purchased in the form of a residential house after taking an interest free cash loan from the assessee. Thus, in our view, there is no transfer of asset by the assessee, as has been canvassed by the ld. DR and also held by the ld. Assessing Officer, as well as by the ld. Commissioner of Income tax (Appeals). The assessee was not the owner of the asset which was transferred to the wife, as argued by the ld. DR, rather out of the interest free loan, the wife of the assessee purchased/acquired “new asset” in her own name from the third parties, thus, in our view, there is no justification for adding the amount as no ‘asset’ has been transferred. For application of section 64 (1)(iv) of the Income tax Act, it is imperative that an individual must have transferred the income yielding “asset” to his spouse. It is only then that in computing the total income of the individual the income arising from such asset can be included. Where an assessee has merely created a charge upon his half share in two properties in respect of his obligation to pay his wife an annual sum, section 64 (1)(iv) would not be attracted. - Following decision of CIT, Gujarat vs. Keshavlal Lallubhai Patel [1964 (11) TMI 9 - SUPREME Court] - Decided in favour of assessee.
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